CGT and the family home

Before I owned a house, I used to slag off the government for exempting family homes from capital gains tax. Inconsistent regulation just creates confusion and adds loopholes, I used to say shaking my head at government failures in general. Now that I’ve been a proud albatross house owner for the last few years, I can only say that sometimes compassion is worth adding labyrinthian tax complexities.

Nonetheless, I was still under the impression that I had to be living in the house for the last 12 months before I could sell it and be free from CGT. This tended to put a dent in my fantasies of getting rid of the thing while i watched interest rates, maintenance costs, bills, insurance and council rates eat into my travel budget.

Now, thanks to the handy ATO CGT exemption tax calculator which I could have looked up at anytime but for some reason never did, I know that I do NOT get slugged with CGT. You needed to have lived in the house for a period of time after you’ve bought it but once you’ve spent that time, you can rent it out. I dont know the detail of course but the calculator said I was exempt and would be exempt for another year or rent (an article somewhere said that you could lease it out for a max of 6 years).

Anyway, the upshot is I can go back to Melbourne and sell the damn thing at this very high point near complete slump of the housing market and have enough moolah to live like a king penniless lonely backpacker in SE Asia and South Asia for the rest of my life on the interest alone.



One thought on “CGT and the family home

  1. n.t says:

    yep. someone thought about the tax system to a certain degree.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: